Employer failed to establish strong prima facie case that employee encouraged co-workers to leave employer in order to work for competitor

FLC Transportation Services Inc. v. Charger Logistics Inc.
267 A.C.W.S. (3d) 929
Ontario Superior Court of Justice

EMPLOYMENT — Duties of employee — General —

Post-employment duties — Employer was involved in arranging transportation of goods across North America — Employee brought clients with him when he joined employer in 2009 — Employee understood he could take his own book of business with him if he left employer — Employee opened small branch office for employer in 2012, from which he largely serviced his own clients — Change in ownership of employer put branch office at risk — Employee and six co-workers resigned and went to work for competitor that provided transportation services directly rather than merely arranged them — Employee’s clients stopped using employer’s services — Employer alleged employee and co-workers used confidential information to solicit clients — Employer commenced action against employee, co-workers, and competitor for relief for breach of confidentiality — Employer brought motion for interim injunction restraining employee and co-workers from, inter alia, competing with employer — Motion dismissed — Employer failed to establish strong prima facie case that employee and co-workers retained or disclosed confidential information contrary to covenants in employment agreements — Reasonableness of covenants was questionable — Employer had acknowledged in unrelated proceedings that there was no proprietary interest in customers, nor was there “confidential information” entitled to protection — In any event, evidence did not support finding strong prima facie case that covenants had been breached — Employer failed to establish strong prima facie case that employee encouraged co-workers to leave employer in order to work for competitor — Employee’s employment contract did not contain non-solicitation covenant relating to customers — Evidence was insufficient to establish strong prima facie case that co-workers breach such covenant — Employee and co-workers were not fiduciaries — Employer also failed to establish irreparable harm, and balance of convenience favoured employee and co-workers — Relief would have also been denied on basis of lack of clean hands